The adoption of emerging technologies is essential for all businesses, and even more important for well-established industries because of the perpetual threat of disruption from competitors. Industries and companies unable to adopt digital transformation are likely to have a short life span in the current digitally driven global competitive environment. While the E&P industry is more than 100 years old and has seen many ups and downs, the prolonged impact of decreased oil prices since 2014 warrants the need for a transformational modification for it to remain operationally viable.

The upstream sector started the digital journey decades ago, leading to incremental improvements. The first step of this journey is “digitization,” which is the creation of data in digital form. Traditional supervisory control and data acquisition (SCADA) systems, meters, utility line monitors, and other equipment provide digital metrics at different frequencies but there are still many operations that are not fully digital, such as daily drilling reports and log reports.

The second step is “digitalization,” which is leveraging digitized data to generate information with limited value creation such as key performance indicators (KPIs) and dashboards. The industry has created and deployed many of these KPIs and dashboards to assess the health of its business; this “data in motion” is being created with little to no associated provenance, thus creating digitized dark data. In simple terms, dark data are data that exist, but no value is being generated from them. There are many reasons for data to be dark, and for the oil and gas industry the two primary reasons are forgotten data in silos and significant amounts of unused data from past operations.

The final step is the transformational step, “digital transformation,” when the business truly encompasses the transformation of talent, business strategy, and resources by leveraging emerging technologies for real-time resource optimization on an ongoing basis.

Is Your Digitalization Creating Value?

The E&P industry claims to have adopted digitization and digitalization in the form of digital oil fields; however this has failed to generate significant economic value during the past 2 decades. The lack of value creation could be attributed to the following:

Incomplete use or nonuse of data-driven innovation

Use of inefficient, complex, and fragmented workflows

Inability to keep pace with the information technology (IT) revolution